[🇧🇩] Banking System in Bangladesh

[Saif]

10 banks are ‘technically bankrupt’: white paper

However, the final draft of the white paper on the state of economy did not disclose the names of the lenders

www.thedailystar.net

10 banks are ‘technically bankrupt’: white paper
However, the final draft of the white paper on the state of economy did not disclose the names of the lenders

Ten crisis-hit banks, mostly Shariah-based ones, are "technically bankrupt and illiquid", according to the final draft white paper on the state of economy, which was revealed today.

"We chose 10 distressed banks to dig into their solvency and liquidity. Of the 10 banks, 2 are state-owned banks that were mostly hit by scams in the last decade. The other 8 are extremely weak shariya-based (shariah-based) banks and conventional private commercial banks," the white paper read.

However, the paper did not disclose the names of the banks.

"All the 10 banks are termed 'distressed' by the regulators, media and public."

Combined loans and deposits of these 10 banks constitute 33 percent of the total loans and 32 percent of the total deposit of the banking sector, it said.

The report, however, said most of these banks did not disclose the fair value of their assets in their financial reporting.

"Their combined adjusted value of the assets is 52 percent of the reported value. As a result, net worth is negative. Liquidity measured by the ratio of liquid assets to total tangible assets indicates 8 out of ten are illiquid," it said.​

 

[Saif]

Banks’ distress asset stands at Tk 6.75 lakh crore

Distressed assets in Bangladesh’s banking sector surpassed Tk 6.75 lakh crore at the end of FY24, an amount equivalent to the cost of 13.5 Dhaka Metro systems or 22.5 Padma Bridges, according to a...

www.newagebd.net

Banks’ distress asset stands at Tk 6.75 lakh crore
Staff Correspondent 02 December, 2024, 00:26

Distressed assets in Bangladesh’s banking sector surpassed Tk 6.75 lakh crore at the end of FY24, an amount equivalent to the cost of 13.5 Dhaka Metro systems or 22.5 Padma Bridges, according to a draft White Paper released on Sunday.

Debapriya Bhattacharya, head of the 12-memebr committee formed to prepare the much-talked-about paper submitted to chief adviser Professor Muhammad Yunus on the day.

The interim government that assumed power on August 8, three days after deposed prime minister Shekh Hasina fled to India on August 5 amid a mass uprising, appointed the committee on August 28 and asked it to submit the report in 90 days.

The report highlights that the banking sector’s woes are not due to isolated incidents but stem from systemic failures and regulatory loopholes that enabled widespread malpractice.

Distressed assets include non-performing loan, rescheduled, restructured, writ ten-off, and litigated loans. The review of the White Paper puts the banking sector on top of the most corruption-ravaged sectors, followed by physical infrastructure, and energy and power.

‘Persistent loan defaults and high profile scams have eroded financial stability and diverted capital away from productive sectors,’ it said.

A fragmented regulatory system allowed significant embezzlement through fake companies or loans granted without proper documentation.

This privilege was often extended to large borrowers, including politically connected entities.

‘The culprits within the banking system are all heavy weights. The big ones coincide with the bad ones,’ it said.

Related-party lending, a glaring issue, has contributed significantly to the crisis.

Directors often arranged reciprocal loans, bypassing weak restrictions on lending to related parties.

By the end of 2023, such practices among directors of eight banks alone accounted for Tk 45,000 crore.

Politically connected borrowers frequently secured massive loans with insufficient collateral, evading legal repercussions due to a culture of impunity and political influence.

Recognised non-performing loans (NPLs) alone reached Tk 2.11 lakh crore by June 2024 — equivalent to the cost of seven Padma Bridges.

These inflated figures highlight the entrenched inefficiency and fragility within the banking system.

The problem worsened as rescheduling and restructuring practices enabled borrowers with poor credit histories to continue accessing new loans.

This lack of accountability reinforced a cycle of defaults and weakened overall financial stability.

Even state-owned banks and politically connected private commercial banks have become persistent threats to the sector.

The White Paper criticises the awarding of excessive banking licenses, which doubled over two decades, oversaturating the market.

Many licenses were issued to oligarchs with close ties to the ruling party, exacerbating corruption.

Boardrooms in several banks were filled with politically aligned or under-qualified individuals, further limiting effective governance.

The lack of autonomy for Bangladesh Bank, coupled with inadequate oversight, compounded the crisis.

Politically influenced decision-making undermined the central bank’s capacity to enforce monetary policy and regulatory measures.

Weak internal and external audits only added to the problem, as technical expertise was often sidelined.

Non-bank financial institutions (NBFIs) also faced severe distress. By September 2023, 29.8 per cent of their disbursed loans, amounting to Tk 21,658 crore, were classified as non-performing.

Just 10 NBFIs accounted for 67.5 per cent of this figure, underscoring the systemic challenges within the broader financial landscape.​

 

[Saif]

Bangladesh Bank raises credit card interest rate

Bangladesh Bank has turned up the dial on consumer credit costs, hiking the ceiling on credit card interest rates by a significant 5 percentage points. Previously maxed out at 20 percent, the new cap soars to a lofty 25 percent, nudging borrowers to tread cautiously in their spending sprees, repor

thefinancialexpress.com.bd

Bangladesh Bank raises credit card interest rate
FE Online Desk
Published :
Dec 01, 2024 22:02
Updated :
Dec 01, 2024 22:02

Bangladesh Bank has turned up the dial on consumer credit costs, hiking the ceiling on credit card interest rates by a significant 5 percentage points.

Previously maxed out at 20 percent, the new cap soars to a lofty 25 percent, nudging borrowers to tread cautiously in their spending sprees, reports bdnews24.com.

The change will take effect in the new year.

A notification issued by the central bank on Sunday said the banks will be allowed to implement the updated rate from 2025.

It was sent to managing directors and chief executives of all scheduled banks.

The central bank justified the decision, saying the hike was made to “ensure proper loan risk management and to align with the increasing costs banks face in their funding operations”.

Islami Shariah-based banks would set their profit rates in accordance with their investment guidelines. Other regulations will remain unchanged.

The maximum interest rate for credit card loans was set at 20 percent in September 2020, and the new hike comes after nearly four years, amid rising inflation concerns.

Governor Ahsan H Mansur had hinted at this adjustment during a meeting with commercial bank executives on Sept 4.​

 

[Saif]

Resuscitating dying banks

The banking sector of the country has been made to bleed on an unprecedented scale during the past one and a half decades of the previous government overthrown on August 5 last. Unsurprisingly, Dr Ahsan H. Mansur, the current governor of the central bank, the Bangladesh Bank (BB), with his credenti

thefinancialexpress.com.bd

Resuscitating dying banks
SYED FATTAHUL ALIM
Published :
Dec 01, 2024 23:35
Updated :
Dec 01, 2024 23:35

The banking sector of the country has been made to bleed on an unprecedented scale during the past one and a half decades of the previous government overthrown on August 5 last. Unsurprisingly, Dr Ahsan H. Mansur, the current governor of the central bank, the Bangladesh Bank (BB), with his credentials as a brilliant banker and economist, had to eat his words that he would not further inject any fresh funds into the crisis-ridden banks to resuscitate them. In fact, last week on Thursday (November 28), the central bank governor informed that he had provided Tk 225 billion in liquidity support to six struggling private banks by printing money. The banks thus receiving the funds include the First Security Islami Bank, National Bank, Social Islami Bank, EXIM Bank, Union Bank and Global Islami Bank. Obviously, the central bank had little choice but to go back on its earlier stance on the matter. Prior to this latest decision by the BB governor, under a guarantee scheme provided by the central bank, an arrangement was made to provide liquidity support to the weak banks by way of short-term loans extended by stronger banks.

But the policy did not work as expected. For, in absence of the central bank's liquidity support, commercial banks had to borrow from the interbank money market to meet their regular liquidity requirements. As a result, in tandem with the surge in the demand for liquidity in the inter-bank money market, the interest rate also shot up. At a stage, the interest on 90-day term loans rose to the highest ever at 13.5 per cent. Similarly, the interest rate in the overnight call money market also rose to slightly over 10 per cent. Clearly, the ailing banks were unable to make up for the losses due to non-recovery of the bad, that is, non-performing loans (NPLs). Add to that the money stolen from banks and laundered. Also, consider the money lying with the corrupt party people, government officials, businesses and others who amassed their wealth illegally during the past regime. They are keeping their money out of the banking system for fear of being seized by the interim government. Apart from that, the common customers who had earlier withdrawn money from their accounts due to loss of faith in the banks are yet to resume their transactions with banks as usual. Under the circumstances, if the ailing banks in question go bankrupt, the worst affected would be the common depositors. Hence is the decision of the BB to keep those banks afloat by injecting fresh funds into them by printing money.

However, unlike what happened during the tenure of his predecessor, Abdur Rouf Talukder, under the previous government, this time printing of money to bail out sick banks has not been done secretly. Actually, the person in charge of the central bank at that time helped the oligarchs owning the seriously ailing private banks so they could make off with the money, launder it and stash away in offshore accounts.

However, the present BB governor has been transparent about the measures he has taken to keep those banks afloat so that their customers could withdraw their money deposited with those banks. To offset the possibility of the newly printed money's potential to drive up inflation, there is also a plan to issue fresh monetary instruments like bonds to mop up the excess money from the market. No doubt, the decision to print fresh money, to some economists and bankers, is a political one. In that case, the main objective, evidently, is to restore the common depositors' trust, which took a severe battering during the previous regime. However, efforts should be there to avoid the risk of running those banks in case the depositors begin to withdraw their money all at once leading to the worst-case scenario of their collapse. Ironically, such dilemma had already been there because those sick banks were already on the verge of collapse due to depositors' distrust as those had repeatedly been failing to honour the customers' cheques or ATM cards being denied access to their accounts. In case of any undesirable situation arising from excessive withdrawal of money from the banks in question by the depositors, the banks could offer lucrative banking products that would encourage their depositors to continue transactions with the banks.

Once the banks are able to gain depositors' trust, the reward will come in the form of increased deposit in the banks. Increased bank deposits also mean easing the pressure of inflation, which is the present policy of the central bank. Notably, to tame inflation, the bank regulator (BB) has been pursuing a contractionary monetary policy whereby bank interest is kept high both to incentivise the depositors and discourage the borrowers. But the measure is also keeping down consumers' demand as well as discouraging private investment in the economy. That means, at the moment, the banking regulator has to walk a tight rope.

In this connection, some economists have questioned the idea of issuing bonds or similar financial instruments to suppress inflation, for the success of the measure is subject to the public's buying those instruments in large quantities. In a poorly developed financial market with a fragile banking sector, weak capital market and a population not adequately educated in the financial sense of the term, popularity of financial instruments will remain in question. In that case, the emphasis should be on acquisitioning and selling the assets of the borrowers behind NPLs.

At the same time, to ensure accountability, strong monitoring of the banking sector should continue.​

 

[Saif]

Banks shun old-time Motijheel for glitzy Gulshan

Motijheel is losing its historic lustre as Dhaka’s commercial hub, with Gulshan, among the wealthiest neighbourhoods in the capital, stealing its thunder.

www.thedailystar.net

Banks shun old-time Motijheel for glitzy Gulshan

Motijheel is losing its historic lustre as Dhaka's commercial hub, with Gulshan, among the wealthiest neighbourhoods in the capital, stealing its thunder.

Nearly half of the country's 61 banks and 35 non-bank financial institutions (NBFIs) have shifted their head offices from Motijheel to Gulshan in the past decade while many others harbour aspirations of moving to what has quickly become the most appealing zip code.

Not only that, but even newly licensed banks, NBFIs and insurance companies have established head offices in Gulshan despite the fact that the Bangladesh Bank is still situated in Motijheel.

For example, Bengal Commercial Bank, awarded a Bangladesh Bank licence in 2020, established its head office in Gulshan. The same is true for Community Bank Bangladesh, licensed in 2018.

Industry people said major factors for this trend include changing business and economy, proximity to the offices of some of the largest corporations in the country as well as hotels and shopping malls, and a lack of modernisation of the Motijheel area.

"Most factories are situated in Gazipur, Ashulia, Tongi and Uttara. So it is punishing for our clients to visit Motijheel. Most of them feel Gulshan is more convenient. That is why banks are so keen to shift their head offices to the area," Mosleh Uddin Ahmed, managing director of Shahjalal Islami Bank, told The Daily Star.

Ahmed outlined another key reason for the Shariah-based lender shifting its head office from Motijheel to Gulshan Avenue in 2014, saying: "Most luxury hotels and shopping malls are located in Gulshan, making it convenient for foreign buyers who visit banks with our local customers."

He added that a major portion of clients now reside in Uttara, Gulshan, Banani and Dhanmondi, making it easier to visit Gulshan compared to Motijheel, adding that the latter offered only one benefit.

"Bangladesh Bank is located in Motijheel, which is the only convenient factor for banks and financial institutions."

The senior banker added that the Motijheel area has been stagnant in terms of development while Gulshan and Uttara were prospering through the expansion of infrastructure and industries.

M Khurshed Alam, deputy managing director of Eastern Bank, which now also boasts a Gulshan address, told The Daily Star that most banks want to be in the vicinity of big corporate houses and businesses, a majority of which are situated in Gulshan and Uttara.

"Similarly, a majority of manufacturing units are located in Gazipur, Bhaluka and Mymensingh. So, banks are shifting their head offices to Gulshan," he said.

Alam added that foreign buyers also prefer Gulshan and Banani instead of Motijheel since those areas are closer to the Dhaka airport.​

 

[Saif]

Govt approves new banknote designs featuring heritage, monuments

The government has officially decided to change the designs of the Tk 20, 100, 500, and 1000 denominations. This decision was approved in a meeting of the Bangladesh Bank board with Bangladesh Bank Governor Dr Ahsan H Mansur in the chair on Sunday, said its spokesperson and Executive Director Husn

thefinancialexpress.com.bd

Govt approves new banknote designs featuring heritage, monuments
Published :
Dec 09, 2024 00:31
Updated :
Dec 09, 2024 00:31

The government has officially decided to change the designs of the Tk 20, 100, 500, and 1000 denominations.

This decision was approved in a meeting of the Bangladesh Bank board with Bangladesh Bank Governor Dr Ahsan H Mansur in the chair on Sunday, said its spokesperson and Executive Director Husne Ara Shikha on Sunday.

Speaking about the approval, Shikha said the new banknotes will feature updated designs.

If all goes as planned, Shikha said, the new notes will be available in the market within six months, UNB reports.

Sources in the central bank said that the new notes will no longer feature the image of Bangabandhu Sheikh Mujibur Rahman.

Instead, she said, the new designs will incorporate religious monuments, Bengali heritage and imagery related to the ‘July Revolution graffiti’.

According to Shikha, the final approval for these changes has already been granted by both the Bangladesh Bank and the government, with printing of the new notes already underway.​

 

[Saif]

Six private banks see bad loans nearly triple in a year

Defaulted loans at six private commercial banks nearly tripled in one year till September 2024, according to central bank data, which bankers term “alarming”.

www.thedailystar.net

Six private banks see bad loans nearly triple in a year

Defaulted loans at six private commercial banks nearly tripled in one year till September 2024, according to central bank data, which bankers term "alarming".

They altogether held Tk 80,573 crore in September this year, which is over 171 percent more than Tk 29,645 crore in September 2023.

National Bank has the highest bad loans among the private commercial lenders. As of September this year, its defaulted loans stood at Tk 23,722 crore, which is 55.81 percent of its total disbursed loans.

The private lender is now suffering from a Tk 16,614 crore provision shortfall.

The bank's bad loans were Tk 13,515 crore a year earlier.

After the formation of the interim government early August, the central bank restructured the board of eleven banks, including National Bank.

The bank is the country's first private sector commercial lender with a prosperous past. But it became a losing concern due to massive loan irregularities, lack of good governance and conflict among directors.

During the 16-year tenure of the previous Awami League government, business conglomerate Sikder Group dominated the bank.

After the recent political changeover, Abdul Awal Mintoo, a businessman and vice-chairman of the Bangladesh Nationalist Party (BNP), became the bank's chairman.

Bad loans at Islami Bank Bangladesh rose to Tk 17,752 crore by September of this year, up from Tk 7,084 crore at the same period last year.

The bad loans figure stood at 11 percent of its total disbursed loans, according to data.

Islami Bank Bangladesh was one of the worst victims of the controversial business conglomerate S Alam Group, which dominated the board of the largest Shariah-based bank until mid-August of this year.

The Chattogram-based conglomerate and its associated companies took out more than 50 percent of the lender's total Tk 163,863.78 crore loans, documents showed.

First Security Islami Bank, Union Bank and Global Islami Bank are three other banks that were under the grip of S Alam Group and saw their bad loans rise sharply in the last year.

In year-over-year calculations, defaulted loans at First Security Islami Bank rose by Tk 10,933 crore to Tk 12,948 crore; bad loans at Union Bank rose by Tk 11,374 crore to Tk 12,218 crore; and bad loans at Global Islami Bank rose by Tk 3,570.91 crore to Tk 3,816.91 crore, according to data.

Those three Shariah-based lenders were also freed from the grip of the S Alam Group as the central bank dissolved the board and formed a new one for each.

Officials of those lenders said that a majority of the disbursed loans taken out by the Chattogram-based business group and its associate companies are now becoming defaulted.

Defaulted loans at AB Bank rose by Tk 4,176 crore to Tk 10,116 crore by September of this year.

Industry insiders said that lackluster loan recovery efforts from top borrowers have contributed to the increase in bad loans at the private sector bank.

Central bank data showed that, except for two or three, bad loans of almost all private sector banks have increased in the last year.

As of September of this year, bad loans in the banking sector stood at Tk 284,977.31 crore, of which Tk 149,806.33 crore were at 43 private commercial banks, according to central bank data.

The figure represents 11.88 percent of their total disbursed loans as of September.

Bad loans at private commercial banks stood at Tk 81,537.81 crore at the same period last year.

Anis A Khan, former chairman of the Association of Bankers, Bangladesh (ABB), told The Daily Star that defaulted loans will increase further in the coming days.

He said that a huge amount of money was siphoned off from the country, which will not return to the banking sector. On the other hand, businesses are now suffering significantly due to global and domestic economic hardships.​

 

[Saif]

Majority of 4th-generation banks issued licences on political considerations

Almost all the fourth-generation banks in Bangladesh were given licences on political considerations, reveals a study conducted by the Bangladesh Institute of Bank Management (BIBM). While a few of these banks have shown promising performance, many are riddled with serious challenges, including

thefinancialexpress.com.bd

Majority of 4th-generation banks issued licences on political considerations
Says a BIBM study
FE REPORT
Published :
Dec 19, 2024 00:34
Updated :
Dec 19, 2024 00:34

Almost all the fourth-generation banks in Bangladesh were given licences on political considerations, reveals a study conducted by the Bangladesh Institute of Bank Management (BIBM).

While a few of these banks have shown promising performance, many are riddled with serious challenges, including liquidity crises, high non-performing loans (NPLs), reputation issues, and regulatory penalties, according to the study.

The study titled "Institutional Sustainability of Fourth-Generation Banks in Bangladesh: A Socio-Psychological Perspective" was presented at a seminar held at the BIBM auditorium on Wednesday.

Dr. Mohammad Tazul Islam, associate professor of BIBM, presented the findings on behalf of the research team, which included Dr. Md. Shahid Ullah, associate professor of BIBM; Dr. Mohammad Monirul Islam Sarker, director of Bangladesh Bank; and Mahmud Salahuddin Naser, director of the Monetary Policy Department, Bangladesh Bank (BB).

The seminar was chaired by Dr. Md. Akhtaruzzaman, director general of BIBM, while Nurun Nahar, chairman of the BIBM Executive Committee and deputy governor of BB, was present as the chief guest.

In her address, Nurun Nahar stressed the urgency of strengthening governance frameworks and enhancing regulatory oversight to improve the sustainability of the fourth-generation banks.

She called for addressing the systemic challenges, including political interference, liquidity crises, and rising NPLs.

The study highlighted that political influence in licensing has weakened the governance structure of many fourth-generation banks, leading to operational inefficiencies. Besides, poor corporate governance, unethical practices, and a lack of transparency in transactions have resulted in increased credit mismanagement and NPL growth.

It further noted that aggressive lending practices, combined with uncontrolled deposit rates, have distorted the competitive market structure.

The study established a strong correlation between higher Advance Deposit Ratios (ADR) and rising NPLs, showing that aggressive lending often compromises credit quality and financial stability.

The research pointed out several critical factors contributing to unsustainability of these banks. They include political interference in decision-making processes, weak enforcement of laws and regulatory oversight, legal loopholes exploited by politically connected defaulters and a short-term strategic vision by bank management and boards.

The study also laid emphasis on socio-psychological challenges, such as cultural norms that tolerate irregularities, fear of economic insecurity, and limited depositor trust. Weak judicial systems and inactive civil society organisations were identified as additional barriers to accountability and governance.

The paper also said that 64 per cent of respondents identified good governance as the most critical factor for institutional sustainability.

Some 60 per cent strongly agreed on the need for improved financial stability and regulatory monitoring, the study said, adding that nearly 60 per cent of respondents also believed there are too many banks in Bangladesh and that new licenses were unnecessary.

The study underscored the importance of normative factors such as professional ethics, education, and job satisfaction in improving institutional sustainability while identifying significant gaps in cultural and legal enforcement frameworks.

The study added the laws enacted by the ill-motivated politician-cum-businessmen lawmakers have intentional loopholes so that they can unduly influence the board and management of the banks and no stern actions can be taken against the defaulters.

The welcome address was delivered by Md. Shihab Uddin Khan, associate professor and director (Research, Development & Consultancy) of BIBM. Designated discussants included Md. Ali Hossain Prodhania, supernumerary professor of BIBM; M. Shamsul Arefin, managing director of National Credit and Commerce Bank PLC; and Md. Shafiul Azam, managing director & CEO of Modhumoti Bank PLC.

Senior bank executives, faculty members, media representatives, and academicians actively participated in the discussions, sharing their insights on addressing the challenges facing the banking sector.

The seminar concluded with a strong call for systemic reforms to ensure institutional sustainability.

After the country's independence in 1971, banking industry in Bangladesh started its journey with six nationalized commercialized banks, two state-owned specialized banks and three foreign banks.There are 61 scheduled banks in Bangladesh. Of them, six are state-owned commercial banks, three specialized banks, 43 private commercial banks (33 conventional and 10 Islamic banks), and nine are foreign commercial banks.

Again, based on the year of establishment, the banking sector is clustered into four generations. Banks incorporated in 1971-1990; 1991-2000; 2001-2012; and after 2013 are called first, second, third, and fourth generation banks respectively.​

 

[Bilal9]

Banks shun old-time Motijheel for glitzy Gulshan

Motijheel is losing its historic lustre as Dhaka’s commercial hub, with Gulshan, among the wealthiest neighbourhoods in the capital, stealing its thunder.

www.thedailystar.net

Banks shun old-time Motijheel for glitzy Gulshan
View attachment 11437

Motijheel is losing its historic lustre as Dhaka's commercial hub, with Gulshan, among the wealthiest neighbourhoods in the capital, stealing its thunder.

Nearly half of the country's 61 banks and 35 non-bank financial institutions (NBFIs) have shifted their head offices from Motijheel to Gulshan in the past decade while many others harbour aspirations of moving to what has quickly become the most appealing zip code.

Not only that, but even newly licensed banks, NBFIs and insurance companies have established head offices in Gulshan despite the fact that the Bangladesh Bank is still situated in Motijheel.

For example, Bengal Commercial Bank, awarded a Bangladesh Bank licence in 2020, established its head office in Gulshan. The same is true for Community Bank Bangladesh, licensed in 2018.

Industry people said major factors for this trend include changing business and economy, proximity to the offices of some of the largest corporations in the country as well as hotels and shopping malls, and a lack of modernisation of the Motijheel area.

"Most factories are situated in Gazipur, Ashulia, Tongi and Uttara. So it is punishing for our clients to visit Motijheel. Most of them feel Gulshan is more convenient. That is why banks are so keen to shift their head offices to the area," Mosleh Uddin Ahmed, managing director of Shahjalal Islami Bank, told The Daily Star.

Ahmed outlined another key reason for the Shariah-based lender shifting its head office from Motijheel to Gulshan Avenue in 2014, saying: "Most luxury hotels and shopping malls are located in Gulshan, making it convenient for foreign buyers who visit banks with our local customers."

He added that a major portion of clients now reside in Uttara, Gulshan, Banani and Dhanmondi, making it easier to visit Gulshan compared to Motijheel, adding that the latter offered only one benefit.

View attachment 11438

"Bangladesh Bank is located in Motijheel, which is the only convenient factor for banks and financial institutions."

The senior banker added that the Motijheel area has been stagnant in terms of development while Gulshan and Uttara were prospering through the expansion of infrastructure and industries.

M Khurshed Alam, deputy managing director of Eastern Bank, which now also boasts a Gulshan address, told The Daily Star that most banks want to be in the vicinity of big corporate houses and businesses, a majority of which are situated in Gulshan and Uttara.

"Similarly, a majority of manufacturing units are located in Gazipur, Bhaluka and Mymensingh. So, banks are shifting their head offices to Gulshan," he said.

Alam added that foreign buyers also prefer Gulshan and Banani instead of Motijheel since those areas are closer to the Dhaka airport.​

You will Insha-Allah see another shift to a newer part of Dhaka further North to newer neighborhoods around Jolshiri's DHA/DOHS commercial hub in another ten or so years.

 

[Saif]

Deposits in full-fledged Islamic banks fall

Savers are increasingly parking their funds at Islamic banking branches and windows of commercial banks in Bangladesh in a move away from full-fledged Shariah based banks, which were mired by irregularities during the tenure of previous government ousted in August this year.

www.thedailystar.net

Deposits in full-fledged Islamic banks fall

Savers are increasingly parking their funds at Islamic banking branches and windows of commercial banks in Bangladesh in a move away from full-fledged Shariah based banks, which were mired by irregularities during the tenure of previous government ousted in August this year.

Deposits at 10 full-fledged Islamic banks fell 2.9 percent to Tk 390,760 crore at the end of September this year from Tk 402,541 crore at the end of June.

Year-on-year, these banks lost 1.11 percent of their deposits amounting to Tk 395,142 crore in September 2023, according to a Bangladesh Bank quarterly report on Islamic banking.

On the other hand, conventional banks with Islamic banking branches recorded roughly 3 percent growth in deposits to Tk 20,582 crore at the end of September from Tk 19,986 crore at the end of June.

Similarly, banks that have Islamic banking windows recorded growth in the flow of savings during the July-September period, data showed.

It is because these banks are relatively in better health and have not faced any major allegations of irregularities like some of the full-fledged Shariah based banks have, said Syed Mahbubur Rahman managing director and CEO of Mutual Trust Bank, which also offers Islamic banking services.

He said the financial health of full-fledged Islamic banks was not good for many days even before the political changeover in August.

The central bank data showed that as a result of the decline in deposits at fully Shariah based banks, total deposits in the Islamic banking system dropped to Tk 436,667 crore at the end of September this year, down 1.94 percent from Tk 445,309 crore in June.

As such, the share of deposits at Islamic banks compared to total deposits dropped by 25.08 percent as of September from 25.56 percent in June.​

 

[Bilal9]

Bangladeshi credit card usage increasing in Thailand, decreasing in India by 40%​

Ittefaq Digital Desk
Published: 18 December 2024, 01:28




As the political landscape has changed in the country after the anti-discrimination student uprising, so has the use of Bangladeshi credit cards. The use of Bangladeshi credit cards is gradually increasing in Thailand. On the contrary, the use of Bangladeshi credit cards in India is decreasing.

This information was revealed from Bangladesh Bank's updated report on credit card transactions at home and abroad.

Analysis of the report shows that the United States is in first place in credit card usage by Bangladeshis. This was the case before. However, the second place has changed. Previously, India was in second place. Thailand rose to second place in October. In the country, Bangladeshi credit card spending increased by 160 million taka in a span of 1 month. India has dropped to third place. And Singapore has risen to fourth place.

According to the central bank, Bangladeshis abroad spent Tk 4.989 billion on credit cards in October this year to purchase various services and products. On the other hand, foreigners in Bangladesh spent Tk 1.29 billion on credit cards.

Earlier, a large number of Bangladeshis used to travel to India every month for travel and medical treatment and spent the most money on credit cards in the country. But after the change in the political situation in the country, there has been a radical change in the use of credit cards by Bangladeshis abroad. Last September, Bangladeshis spent 420 million taka on credit cards in Thailand. In October, this expenditure increased to 570 million taka. As a result, the country came in second place in the use of credit cards by Bangladeshis abroad. India was also in second place in September. In October, Bangladeshi spending on credit cards in India moved to third place.

Industry insiders say that after the August change of policy, India has tightened visas for Bangladeshis, including travel and medical. Due to which, the number of Bangladeshis traveling to the country has decreased significantly. As a result, the use of credit cards by Bangladeshis in the country has also decreased. Now, Bangladeshis are choosing Thailand, Malaysia and Singapore instead of India for medical treatment and travel. Due to this, the use of credit cards by Bangladeshis in these countries has also increased.

According to Bangladesh Bank data, the use of credit cards at home and abroad increased significantly in October. In the space of one month, credit card spending within the country increased by 197 million taka, or about 7.5 percent. And spending abroad increased by 780 million taka, or more than 18.5 percent.

According to the data, in October, 2,866 crore taka was spent on credit cards within the country. In September, the amount was 2,669 crore taka. And in October, Bangladeshis spent 4.99 billion taka on credit cards in different countries of the world. In September, the amount was 4.21 billion taka. The highest use of Bangladeshi credit cards abroad is now in the United States. In October, 840 million taka was spent in the country, compared to 770 million taka in September. Accordingly, in the space of one month, Bangladeshi credit card spending in the United States increased by 70 million taka or more than 8.15 percent.

According to Bangladesh Bank data, more than 28 percent, or almost one-third, of the money Bangladeshis spend abroad on credit cards is currently spent in the United States and Thailand. Of the 4.99 billion taka spent abroad in October, 1.41 billion taka was spent in these two countries. India was in third place in terms of credit card spending. Bangladeshis spent 540 million taka in the country in October, which is 40 million taka more than the previous month.

Singapore has seen the biggest growth in credit card spending abroad after Thailand. Bangladeshis spent Tk 430 million in the country in October, up from Tk 300 million in September. That means credit card spending in the country has increased by Tk 130 million in a month.

Meanwhile, cash withdrawals from credit cards have increased. In September, the amount of cash withdrawals was Tk 38 crore. In October, it increased to Tk 46 crore 8 million. Among the different types of cards, Visa card is being used more. Because this card can naturally be used in the international arena. Next are Master Card, Unipay, and Amex.

 

[Saif]

Potential of a green bank

If the sponsors can convince foreign investors to come up with money to form a huge primary capital, there is no reason why it should not be given the go-ahead Even the very nomenclature, 'climate bank' that is, is innovative and highly appealing. Much as the public and priva

thefinancialexpress.com.bd

Potential of a green bank
FE
Published :
Dec 25, 2024 22:01
Updated :
Dec 25, 2024 22:01

If the sponsors can convince foreign investors to come up with money to form a huge primary capital, there is no reason why it should not be given the go-ahead

Even the very nomenclature, 'climate bank' that is, is innovative and highly appealing. Much as the public and private commercial banks may find themselves pitted against overwhelming odds---some of those in an intractable imbroglio, this unique idea of a green bank catering only to the environmental issues demands a closer scrutiny. First of its kind not only in this country but perhaps in the wider world, the bank primarily proposes to help build a green economy. The other important objective it wants to serve is play a crucial role in attaining the country's sustainable development goals (SDGs) scheduled for 2030. An organisation named the Water and Essential (WE) has already submitted its proposal for a licence to the Ministry of Environment, Forest and Climate Change (MoEFC) and the latter has forwarded it to the financial institution division (FID) but not before suggesting the formation of a committee for a feasibility study. But it is the Bangladesh Bank which has the authority to approve a bank.

Notwithstanding the rosy picture the sponsor of the proposed bank paints in favour of mitigating the increasingly growing fragile environment, the details of how its financing will serve the objectives are yet to be available. Even if the bank comes into being, there is no guarantee investors from home and abroad will beeline for investment up to 95 per cent ceiling of capital on offer. More importantly, green banking does not automatically translate into green projects, the majority of which are supposed to be in the energy sector. Production of green energy certainly has immense potential but the technology and set-ups are still costlier than the conventional methods that use fossil fuels. Private companies may not feel particularly encouraged to take up the challenge in this unproven territory of energy. Banks can finance but if there is no taker of loan for investment in power generation or other green initiatives such as developing alternatives to plastic, the green bankability is likely to fall through.

So the sponsors have to convince both the approving authorities and the would-be clientele of the merit of not only green banking but also of gainful use of the capital. One of the veteran economists of the country is reportedly not at all convinced. He has dismissed the idea, saying that at the time of organising a bank or financial institute, its organisers make tall promises only to prove unsubstantial when in practice.

Even without being as much dismissive as this, it is impossible to deny the obtaining reality in the banking sector. The liquidity crisis is acuter now with the exchange rate overshooting the crawling peg of a dollar at Tk120 by Tk6.0-7.0 i.e 1.0 dollar sells at Tk126-127. In such a crunch time, the addition of another bank to the existing 62, far higher than the size of the country's economy can afford, is unlikely to inspire enough enthusiasm much as it may sound appealing. Even its paid-up capital amounting to Tk3.24 billion may not prove lucrative to investors. But if the sponsors can convince foreign investors to come up with money to form a huge primary capital, there is no reason why it should not be given the go-ahead. In that case foreign investors will study every detail before outlaying their money in the venture.​